A spokesperson for the home sound system maker told ZDNet that, “if a customer chooses not to acknowledge the privacy statement, the customer will not be able to update the software on their Sonos system, and over time the functionality of the product will decrease.”

“The customer can choose to acknowledge the policy, or can accept that over time their product may cease to function,” the spokesperson said.

The move has drawn ire from several privacy and policy experts.

“Sonos is a perfect illustration of how effective privacy, when it comes to not just services but also physical objects, requires more than just ’more transparency’ — it also requires choices and effective controls for users,” said Joe Jerome, a policy analyst at the Center for Democracy & Technology.

“We’re going to see this more and more where core services for things that people paid for are going to be conditioned on accepting ever-evolving privacy policies and terms of use,” he said. “That’s not going to be fair unless companies start providing users with meaningful choices and ensure that basic functionality continues if users say no to new terms.”

Lee Tien, a senior staff attorney at the Electronic Frontier Foundation, said it was a “growing” problem among the consumer electronics space.

“[Device] makers obviously can do a lot about the problem,” said Tien. “They can design their systems to separate more data collection side from product feature. Obviously some features don’t work without data but even so, you can often choose to store data locally and not transmit it to some mothership somewhere.”

“Society as a whole continues down a path where devices in your home, traditionally our most private space, are largely controlled by other people who want to know what you’re doing,” he said.

The biggest problem for Palantir’s business may be just how well its software works: It helps its customers see too much. In the wake of NSA leaker Edward Snowden’s revelations of the agency’s mass surveillance, Palantir’s tools have come to represent privacy advocates’ greatest fears of data-mining technology — Google-level engineering applied directly to government spying. That combination of Big Brother and Big Data has come into focus just as Palantir is emerging as one of the fastest-growing startups in the Valley, threatening to contaminate its first public impressions and render the firm toxic in the eyes of customers and investors just when it needs them most.

Karp, a social theory Ph.D., doesn’t dodge those concerns. He sees Palantir as the company that can rewrite the rules of the zero-sum game of privacy and security. “I didn’t sign up for the government to know when I smoke a joint or have an affair,” he acknowledges. In a company address he stated, “We have to find places that we protect away from government so that we can all be the unique and interesting and, in my case, somewhat deviant people we’d like to be.”

Palantir has explored work in Saudi Arabia despite the staff’s misgivings about human rights abuses in the kingdom. And for all Karp’s emphasis on values, his apology for the WikiLeaks affair also doesn’t seem to have left much of an impression in his memory. In his address to Palantir engineers in July he sounded defiant: “We’ve never had a scandal that was really our fault.”

AT 4:07 P.M. ON NOV. 14, 2009 Michael Katz-Lacabe was parking his red Toyota Prius in the driveway of his home in the quiet Oakland suburb of San Leandro when a police car drove past. A license plate camera mounted on the squad car silently and routinely snapped a photo of the scene: his off-white, single-floor house, his wilted lawn and rosebushes, and his 5- and 8-year-old daughters jumping out of the car.

Katz-Lacabe, a gray-bearded and shaggy-haired member of the local school board, community activist and blogger, saw the photo only a year later: In 2010 he learned about the San Leandro Police Department’s automatic license plate readers, designed to constantly photograph and track the movements of every car in the city. He filed a public records request for any images that included either of his two cars. The police sent back 112 photos. He found the one of his children most disturbing.

“Who knows how many other people’s kids are captured in these images?” he asks. His concerns go beyond a mere sense of parental protection. “With this technology you can wind back the clock and see where everyone is, if they were parked at the house of someone other than their wife, a medical marijuana clinic, a Planned Parenthood center, a protest.”

His office, decorated with cardboard effigies of himself built by Palantir staff and a Lego fortress on a coffee table, overlooks Palo Alto’s Alma Street through two-way mirrors. Each pane is fitted with a wired device resembling a white hockey puck. The gadgets, known as acoustic transducers, imperceptibly vibrate the glass with white noise to prevent eavesdropping techniques, such as bouncing lasers off windows to listen to conversations inside.

He’s reminiscing about a more carefree time in his life–years before Palantir–and has put down his Rubik’s cube to better gesticulate. “I had $40,000 in the bank, and no one knew who I was. I loved it. I loved it. I just loved it. I just loved it!” he says, his voice rising and his hands waving above his head. “I would walk around, go into skanky places in Berlin all night. I’d talk to whoever would talk to me, occasionally go home with people, as often as I could. I went to places where people were doing things, smoking things. I just loved it.”

“One of the things I find really hard and view as a massive drag … is that I’m losing my ability to be completely anonymous.”

It’s not easy for a man in Karp’s position to be a deviant in the modern world. And with tools like Palantir in the hands of the government, deviance may not be easy for the rest of us, either. With or without safeguards, the “complete anonymity” Karp savors may be a 20th-century luxury.

Karp lowers his arms, and the enthusiasm drains from his voice: “I have to get over this.”